NZ stocks: Telecom weakness drags quiet market lower

12.00pm

Further weakness in lead stock Telecom dragged the New Zealand sharemarket lower this morning in quiet on-market action.

The benchmark NZSE-40 capital index fell 6.58 points to 1955.51 at 11.30am. On-market volume was miniscule but hefty pre-market trading boosted turnover to $41 million.

The US market appeared to shrug off news that Iraq had accepted UN demands to allow weapons inspectors in and averting the prospects of war. It ended a choppy session slightly in the positive with the Dow up 12.5 points.

Locally, two thirds of the volume was in Telecom, which dropped 6c to 484 mainly as overseas telcos fell overnight. British heavyweight Cable & Wireless lost a third of its value after announcing a disappointing result and announcing retrenchment plans.

Port of Tauranga continued to perform strongly following its share split this week. It zoomed ahead another 11c to a readjusted record high of 430 on heavy turnover worth $4.4 million.

Fletcher Forests was steady on 22c and the preference shares rose 1c to 22 after the company yesterday said it was changing strategy, dropping its forest-owning ambitions and concentrating on "front end" business.

Fletcher Building fell back 3c to 328 after closing on a new high yesterday of 331, up 15c. On Tuesday, the company forecast an 80 per cent rise in core earnings to around $140 million in the first half, excluding its Laminex purchase.

Tourism Holdings retreated 1c to 98 from its 9c rise yesterday on news it was expecting $4 million in half year profit.

Baycorp Advantage recouped some of its heavy losses of the last week, rising 16c to 198. There was heavy turnover. The company last week lost half its value on a profit warning.

Cavalier Corp soared 55c, 8.5 per cent to a record 700 following an announcement yesterday that it was forecasting a $9 million half year net profit and was aiming for inclusion in the top 40 index.

Auckland Airport fell back 4c to to 525, having risen 14c in the last two days after the Auckland City Council confirmed it was looking at an institutional book-build for part of the sale of its 25.6 per cent stake in the airport company.

Other moves of note included: Fisher & Paykel Appliances, down 5c to 1080, Richmond, down 10c to 180, and Wakefield hospital, down 5c to 131.

There were 23 rises and 35 falls among the 105 stocks traded.

- NZPA